An extra 20,000 children will be pushed into poverty because of changes to benefits and tax credits

The Work and Pensions Minister Esther McVey revealed the extent to which planned changes to benefits and tax credits under the Welfare Benefits Uprating Bill will affect child povery figures in a response to a question put forward by Chris Skidmore, Conservative MP for Kingswood.

The Welfare Benefits Uprating Bill, which was read for a second time in the House of Commons last week, will limit increases to most working-age benefits and tax credits to the below-inflation rate of 1 per cent, for the next three years. The current rate of inflation is above 2 per cent.

Ms McVey (right) went on to say that despite rates of benefits and tax credits rising in cash terms where subject to an uprating, because the relative poverty income line moves each year in cash terms too, some families will move below this line over the period.

She said, ‘In times of recession the relative poverty line tends to fall. In 2010-11, 300,000 children moved out of relative poverty largely due to reductions in median incomes. Absolute poverty remained unchanged. It cannot be right that we can move children out of poverty through a recession.

‘We estimate that the uprating measures in 2013-14, 2014-15 and 2015-16 will result in around an extra 200,000 children being deemed by this measure to be in relative income poverty compared to uprating benefits.’

The Work and Pensions Minister also argued that the measure of child poverty, which is based on relative income alone, is not helpful in tracking progress towards the target of eradicating child poverty.

The Department for Work and Pensions is currently consulting on better measures of child poverty that reflect the reality of child poverty in the UK today. The consultation closes on 15 February.

Last week, the Child Poverty Action Group (CPAG) released its report- 'The Double Lockout', which  argues that the welfare bill will lead to a rise in child poverty.

Commenting on the new figures, Alison Garnham, chief executive of the Child Poverty Action Group, said, 'The Government’s child poverty strategy is in utter disarray now that minsters have admitted the poverty-producing Welfare Benefits Uprating Bill will push 200,000 more children into poverty. This means in total Coalition policies are set to push a million more children into poverty by 2020.
 
'Ministers seem to be in denial that, under current policies, their legacy threatens to be the worst poverty record of any Government for a generation, despite their duties under the Child Poverty Act to reduce child poverty across a basket of measures including absolute, relative and persistent poverty as well as for deprivation levels which show how well families are able to meet basic costs.'

She added, 'The bad news is compounded by new Government figures showing the Universal Credit would not result in nearly as much poverty reduction as minsters had previously claimed. It will now lift 150,000 children out of poverty not 350,000 as originally claimed.

'Short term spending cuts that create poverty will end up costing taxpayers billions in the future and inflict huge damage on children and our economy.'